According to a Transforma Insights report, Vodafone is best positioned to be a hyperscale IoT connection provider, followed by Deutsche Telekom, Telefónica, Telenor, KORE, and Telia. The paper emphasizes the importance of communications service providers pivoting to becoming hyperscale IoT connectivity providers if they are serious about addressing the IoT.

It compares the strengths of 12 worldwide IoT connection providers in categories such as networks, platforms, vertical offers, and commercial strategy.

The market for cellular IoT connectivity has recently gotten more complex and competitive. In these circumstances, communications service providers (CSPs) must rethink their market plans and tactics. There are essentially two options: discover new cash streams or put systems and processes in place to deal with the challenges.

The report focuses on the CSP’s primary duty, which is to provide connection. To be successful in this attempt, a CSP must transform into a hyperscale IoT connection provider. The evaluation focuses on whether the CSP has implemented or is in the process of implementing the essential capabilities to enable scalable connectivity to serve at least ten times the number of devices at low-cost points.

The report ranks each CSP based on their ability in seven critical areas, which are listed in decreasing order of priority in the chart below.

According to the assessment against those seven criteria, Vodafone comes out on top in terms of possessing the capabilities required to be a hyperscale IoT connectivity provider, followed by Deutsche Telekom, Telefónica, Telenor, KORE, and Telia.

The possibility associated with IoT for CSPs is not confined to connectivity provision. Many distinguished themselves in other significant ways. One solution is to provide vertical services. Many CSPs have very strong, even market-leading, capabilities in specific vertical areas. However, the barriers to entry are substantial in most vertical markets, and following a me-too approach to introducing vertical offerings in every interesting category is bound to failure.

Vodafone again ranks first in terms of the strength of its vertical portfolio, followed by Verizon, Telefónica, and Orange.

There is further potential in IoT for horizontal advisory, consultancy, and systems integration services. The issue with this segment of the market is that it is difficult to scale. Nonetheless, it is an important element of the market. Deutsche Telekom and Orange are two CSPs with significant consultancy and systems integration capabilities.

The Transforma Insights ranking is summarized in the graphic below. Hyperscale IoT connectivity capabilities are depicted on the vertical axis. The horizontal axis calculates an overall score for offering client-specific services in both vertical and horizontal advice, consultancy, and systems integration.

It should be emphasized, according to Transforma, that even the highest-scoring CSP still had some way to go to achieve the requirements of what is considered an optimal hyperscale IoT connection provider.

Report author Matt Hatton said: “CSPs must continue to evolve towards the goal of being a hyper-scale IoT connectivity provider, supporting the necessary suite of scalable technologies and capabilities necessary to profitably address the growing cellular IoT market opportunity.”